Hi Hope and welcome,
It is a long story, but basically if JPMC/FDIC settle the claims prior to jury trial/summary judgment/incriminating discovery, common shares may be compensated to a level exponentially higher than the current price.
I dare not dream and give you an inaccurate figure, but some posters believe WAMUQ will ascend somewhere between $8.00-$36.00 per share (with $36 being the upper limit of damages from fraudulent conveyence and business tort claims), with a general consensus between $8.00-$12.50 per share following a settlement (A poster on the Yahoo board cited a $26B book value for WMI's combined assets, or $12.35 pps). A few are not as optimistic and see a range between $1.00-$3.00 per share.
Common shares' book value on WMI's financial statements are about $7.63 per share. Before FDIC seized WMB and WMBfsb, TPG Capital made contributions in the neighborhood of $8.75 per common share. Prior to the seizure in 2008, WMI (holding company for Washington Mutual Bank) refused an $8.00 per share offer from JPMC.
Speculation that common shares will be canceled is discussed from time to time because WMI is in bankruptcy proceedings and common shareholders historically get screwed (either through Chapter 7 liquidation or issuance of new shares following reorganization). So far WMI's legal team have not once suggested WAMUQ will be canceled (unlike GM, if you recall). Indeed, court documents reveal WMI seeks to achieve maximum recovery for creditors and stakeholders. Many of us here believe this is a rare opportunity for huge $$$, or at least a comfortable recovery for pre-seizure shareholders.
We don't exactly know what we will get at this stage, but WMI's cases are going well and its lawyers are doing an excellent job. Settlement would be the quickest path - either in cash or (more likely) in a stock swap with JPMC. But all is conjecture while these cases are in litigation...
IMO GLTA
News 
Market Data 
Discover 
